Wednesday, April 01, 2009

Harper on CNN

Some economists, including the former governor of the Bank of Canada, David Dodge, and the parliamentary budget watchdog Kevin Page, have argued that Ottawa is treading perilously close to a "structural deficit" position. In other words, even if the recession hadn't driven down corporate and personal income tax revenues and prompted the government to jack up spending to stimulate demand, Ottawa would still be substantially in the red.

A structural deficit would imply that Ottawa would find it next to impossible to move back into surplus position within five years as promised in the last Conservative budget — unless the government raised taxes to bring in more revenue.